SIMONA plans to acquire the Turkish market leader for PVC foam sheets

MOSCOW (MRC) -- SIMONA AG plans to acquire 70 per cent of the ownership interests in MT Plastik AS, Duzce, Turkey. Established in 2007, MT Plastik is Turkey's market leader within the area of PVC foam sheets, said the company.

The products are used primarily in the field of digital printing, advertising and structural engineering. MT Plastik is a private owned company, employing around 50 people and generating revenue in excess of EUR11 million. The company exports approx. 60 per cent of its revenue, mainly to Europe. The planned acquisition is to be seen in the context of SIMONA's strategic realignment in Europe and will help to strengthen the Group's market position within the area of PVC foam products.

SIMONA wants to establish itself as Europe's market leader for PVC foam sheets with regard to quality, breadth of product portfolio and market share. In acquiring MT Plastik, a highly profitable and very well organised company with lean structures, SIMONA has laid the foundation. In addition, Turkey as a location and the high share of exports already achieved by MT Plastik gives access to other interesting markets in Europe and the Middle East.

The transaction combines the mature product portfolios of two companies with extensive experience and expertise. Customers will benefit from a greater focus on applications, a stronger market presence based on a dense network of competent distribution partners and improved logistics and services.

The existing owners of MT Plastik have committed themselves to the new alliance for the long term under the leadership of the current chairman and majority shareholder Tufan Kalkan and will retain 30 per cent of the interests.

Subject to the final approval of the antitrust authorities, the transaction is expected to be closed on 31 December 2020.

According to ICIS-MRC Price report, a shortage of PVC has remained in many regions of the world for the past few months because of scheduled and unscheduled shutdowns of the plants amid strong demand, and prices have broken records for the past few years. And this situation is reflected in the Russian market. In the autumn months, Russian producers virtually maintained their prices of suspension in dollars the same for the domestic market, whereas the weakening of the rouble against the dollar boosted prices for domestic consumers. Russian producers announced a price increase of on average of Rb3,000/tonne for November deliveries.

Bayer swings to loss on EUR10-billion impairment, challenging ag markets

MOSCOW (MRC) -- Bayer swung to a third-quarter net loss of EUR2.74 billion (USD3.21 billion) from a net profit of EUR1.04 billion a year earlier on sales of EUR8.51 billion, down 5.1% on a currency- and portfolio-adjusted basis, said Chemweek.

The net loss includes non-cash impairment charges on intangible assets, and provisions, totaling EUR10.18 billion. They are mainly in Bayer’s agricultural division, crop science, in connection with potential future litigation in the US related to the company’s glyphosate-based herbicide Roundup™. Other special charges are from an ongoing restructuring program and litigation at Bayer’s pharmaceuticals business.

Bayer’s EBITDA before special items decreased by 21.4% year on year (YOY) in the third quarter to EUR1.79 billion, including a negative currency effect of EUR205 million, missing analysts’ consensus estimate by 12.7%. Crop science was the main driver of the miss with a big decline in third-quarter sales and earnings due partly to seasonal factors. Bayer has nevertheless confirmed its outlook for full year 2020.

“We saw a challenging quarter in our agricultural business, a recovery in our pharmaceuticals business, and strong growth at consumer health,” says Bayer CFO Wolfgang Nickl. “The impact of the pandemic is placing additional strain on our crop science division. We are also facing negative currency effects, such as the massive depreciation of the Brazilian real, which is weighing heavily on business in the world’s second-largest agricultural market."

The third quarter was “weak” with a “substantial impact of the pandemic,” and Bayer relied on “stringent cost management and the acceleration of our structural measures,” says Werner Baumann, Bayer chairman. Sales at the crop science business dropped 11.6% YOY, foreign exchange and portfolio adjusted, in the third quarter, to EUR3.03 billion. Business was down in North America in particular, and sales increased in APAC. EBITDA before special items swung to a negative EUR34 million from a positive €500 million in the year-earlier period, mainly due to the decrease in sales in North America. There was also a negative currency effect of EUR123 million, Bayer says.

Worldwide sales at the corn seed and traits segment fell by 39.9%, adjusted, with substantial declines in North America in particular due to higher product returns and lower license revenue arising from lower-than-anticipated planted acreages for corn this year. At the herbicides segment, sales declined by 12.7%, adjusted, against a strong prior-year quarter. Business was primarily down in North America, where sales in 2019 had shifted into the third quarter due to extreme weather conditions in the first half of that year.

Bayer says it continues to work on a joint proposal to address potential future Roundup™ claims together with plaintiffs’ counsel. Provisions taken by Bayer in the third quarter include an additional measure to cover the increased cost of a revised class plan, “as it is far enough along in the negotiations to know that the new plan will come in at approximately USD2 billion, an increase over the original cost of USD1.25 billion,” the company says.

Bayer says that approximately 88,500 claims in the litigation involving Roundup™ products are so far covered by fully executed master settlement agreements (MSAs), MSAs to be executed, or agreements in principle. At the end of June, Bayer reported that there were approximately 125,000 filed and unfiled claims. “Given uncertainties about eligibility and participation, this number will not be finalized until the settlement process is completed,” Bayer says.

Sales of Bayer’s pharmaceuticals business declined 1.8%, on a foreign-exchange and portfolio adjusted basis in the third quarter, to EUR4.23 billion with EBITDA before special items edging up 0.9% to EUR1.51 billion. “Thanks to stringent cost management, the division was able to grow its earnings and margin despite the decline in sales due to the negative overall impact of COVID-19 as well as negative currency effects of EUR48 million that additionally weighed on earnings,” Bayer says.

Sales of Bayer’s consumer health business increased 6.2%, adjusted, to €1.20 billion putting the division’s growth well ahead of industry market growth, the company says. The growth trend was driven by the nutritionals segment, with sales rising 21.4% due to the greater focus on health and prevention in connection with the COVID-19 pandemic as well as the launch of new products, Bayer says.

EBITDA before special items at consumer health increased by 12.3% to EUR301 million, primarily due to the substantial increase in sales and positive contributions from an efficiency program launched in late 2018.

Bayer has maintained its currency-adjusted group outlook for full year 2020 of an increase in sales to EUR43–44 billion and rise in its EBITDA margin before special items to about 28%. This would correspond to EBITDA before special items of about EUR12.1 billion after adjusting for currency effects. Bayer says it expects full-year sales and earnings to come under even greater pressure from currency headwinds.

As MRC informed earlier, Covestro (formerly Bayer MaterialScience) received its first delivery of certified renewable phenol from Borealis, to be used as a drop-in feedstock for the production of polycarbonate plastic. The phenol is manufactured by Borealis using renewable hydrocarbons feedstock supplied by Neste, sourced from waste and residual oils and fats.

As MRC reported earlier, Covestro has closed the sale of its European polycarbonates (PC) sheets business to the Munich-based Serafin Group effective January 2, 2020. This includes key management and sales functions throughout Europe as well as production sites in Belgium and Italy.

According to MRC's ScanPlast report, overall estimated consumption of PC granules in the Russian market reached 58,000 tonnes in January-July 2020, up by 22% year on year (47,500 tonnes).

Covestro (formerly Bayer MaterialScience) is an independent subgroup within Bayer. It was created as part of the restructuring of Bayer AG from the former business group Bayer Polymers, with certain of its activities being spun off to Lanxess AG. Covestro manufactures and develops materials such as coatings, adhesives and sealants, polycarbonates (CDs, DVDs), polyurethanes (automotive seating, insulation for refrigerating appliances) etc. With 2019 sales of EUR12.4 billion, Covestro has 30 production sites worldwide and employs approximately 17,200 people (calculated as full-time equivalents) at the end of 2019.

Chinese Zhongmei Yulin to start up new LDPE/EVA plant by mid-November

Chinese Zhongmei Yulin to start up new LDPE/EVA plant by mid-November

MOSCOW (MRC) -- Shaanxi Yanchang Zhongmei Yulin phase II new low density polyethylene (LDPE)/ethylene-vinyl-acetate (EVA) plant is slated to startup by the middle of November 2020, reported CommoPlast with reference to market sources.

Initially the company intened to begin the trial runs at this plant by November, 2020.

Based in Shaanxi, China, the LDPE/EVA swing plant has a production capacity of 300,000 tons/year. It is expected to startup with production of LDPE and then following by EVA.

A source closed to the company informed that EVA will be the core production focus for this plant, hence shall not be impacting much on PE market in China.

As reported earlier, Shaanxi Yanchang Zhongmei Yulin Energy and Chemical Co Ltd shut it’s polypropylene (PP) 2 and linear low density (LLDPE) units for scheduled turnaround on 1 August, 2016. Meanwhile, its MTO, PP1 and high density polyethylene (HDPE) units were shut on 8 August 2016. Based in Shaanxi, China, the company has a PP1, PP2, HDPE and LLDPE units each with a production capacity of 300,000 ton/year. The units are expected to remain off-stream for 45 days.

According to MRC's DataScope, September EVA imports to Russia fell by 30,32% year on year to 2,38 tonnes from 3,420 tonnes a year earlier, and overall imports of this grade of ethylene copolymer into the Russian Federation dropped in January-September 2020 by 9,85% year on year to 26,340 tonnes (29,220 tonnes a year earlier).

Federal Circuit hands Chevron a loss on crude oil testing patent

MOSCOW (MRC) -- A divided appeals court on Wednesday upheld a win for the University of Wyoming Research Corp. in a patent dispute with Chevron U.S.A. over a process for analyzing a tar-like substance found in fossil fuels, said Chemweek.

The 2-1 decision of the U.S. Court of Appeals for the Federal Circuit affirmed the Patent Trial and Appeal Board’s conclusion that dueling patent applications by Chevron and the university described the same process for analyzing the stability of asphaltenes, which can affect crude-oil yields and refinery operations.

As per MRC, Chevron Lummus Global (CLG) announced they have been awarded a contract by China's largest oil and gas producer and distributor, PetroChina Company Limited, for the supply of its proprietary ISOMIX-e reactor internals for two of their RDS units in Liaoning Province.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

Headquartered in San Ramon, California, Chevron Corporation is the the second-largest integrated energy company in the United States and among the largest corporations in the world. Chevron is involved in upstream activities including exploration and production, downstream activities including refining, marketing and transportation, and advanced energy technology. Chevron is also invested in power generation and gasification processes.

Neste and LG Chem building a strategic partnership

MOSCOW (MRC) -- Neste, a leading producer of renewable diesel and sustainable aviation fuel and a forerunner as a provider of renewable and circular solutions for the petrochemical industry, and LG Chem, South Korea’s largest diversified petrochemicals company and a leading manufacturer of lithium-ion batteries for energy solutions, have announced their aim to build a strategic long-term partnership to develop and grow the biopolymers and biochemicals market globally, and more specifically, in the LG Chem’s home market Korea, according to Hydrocarbonprocessing.

Thanks to the partnership, LG Chem will start replacing fossil feedstock commonly used in the manufacturing of polymers and chemicals with Neste Renewable Hydrocarbons in the upcoming months. This helps LG Chem to produce renewable polymers and chemicals to meet the increasing sustainability requirements and expectations of its customers – such as those producing polyolefin-based containers, packaging, hygiene products, and electronic materials – without compromising on quality, performance or recyclability of its products.

“We are delighted to start collaborating with LG Chem, a company with one of the most diverse polymers and chemicals offerings in the world, to make an increasing impact on the global industry’s transformation towards a circular bioeconomy. This cooperation enables us to further expand the portfolio of applications that can benefit from Neste’s renewable drop-in solutions”, says Mercedes Alonso, executive vice president, Renewable Polymers and Chemicals from Neste.

"LG Chem’s proprietary technology and significant market share of diverse chemical products and Neste’s sustainable solution based on renewable hydrocarbons, have come together in a partnership that will pave the way for sustainable growth in building a circular bioeconomy for both parties and also the global industry”, says Kug Lae Noh, executive vice president and the president of Petrochemicals Company from LG Chem.

Neste’s renewable hydrocarbons are produced entirely from traceable, bio-based raw materials, such as waste and residue oils and fats, providing a high-quality, more sustainable alternative to fossil feedstock.

As MRC reported earlier, LG Chem, a South Korean petrochemical major, has shut down its naphtha cracker in Yeosu following a fire. The company said a fire broke out at its central control room at the Yosu cracker complex at around midnight local time (15:00 GMT) on 5 November. The country's largest chemical company said it was in the process of figuring out the cause of the fire. The facility can process about 1.2 million tonnes of ethylene per year (tpy).The cracker shutdown is expected to last at least three weeks.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC"s ScanPlast report, Russia"s estimated PE consumption totalled 1,594,510 tonnes in the first nine months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, exluding producers" inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

LG Chem Ltd., often referred to as LG Chemical, is the largest Korean chemical company and is headquartered in Seoul, South Korea. It has eight domestic factories and global network of 29 business locations in 15 countries. LG Chem is a manufacturer, supplier, and exporter of petrochemical goods, IT&E Materials and Energy Solutions.